In September 2022, Chris Bowen posted a photo of himself with the all-electric Ford F-150 Lightning ute on Facebook, declaring it to be “hugely popular” in the US.
It wasn’t.
Conventional F-150s have outsold the electric version by around 30 to one over the last four years.
In December, Ford announced it was ceasing production of the 3-tonne monster after a series of recalls for faults ranging from fuel leaks and faulty steering wheels to cars that could roll away when parked.
Ford’s investment in electric vehicles ranks among the biggest strategic blunders in automotive history.
US energy writer Robert Bryce estimates that the company’s total loss from the venture is USD$35 billion.
Ford recently announced the closure of its $5.8 billion EV battery plant in Kentucky, which only began production in August.
The Kentucky government is trying to recover the $250 million soft loan it gave to Ford to sweeten the deal.
Across the Western car industry, the reckoning has been swift and expensive.
In January, General Motors notified the US Securities and Exchange Commission of a $7.1 billion write-down, largely due to sluggish consumer demand for EVs.
The company’s flagship EV assembly plant in Orion, Michigan, has switched back to the production of SUVs and pickups powered by internal combustion engines (ICE).
Porsche has booked a $1.9 billion loss on its EV division and is rapidly retooling to focus on ICE vehicles.
Four years ago, Mercedes announced its ambition to be an all-electric-vehicle manufacturer by 2030.
Last year, Mercedes-Benz ICE sales outnumbered EV sales by more than 9 to 1.
Legislators who set ambitious targets for EV penetration have been scrambling to adjust to the new reality.
In December, the European Union scrapped its 2023 commitment to ban the sale of ICE and hybrid vehicles by 2035.
It follows concerted lobbying by German Chancellor Friedrich Merz, who says the German car industry is in a “precarious” position.
This week, Canadian Prime Minister Mark Carney bowed to pressure from the car industry by scrapping the country’s EV mandate.
He has replaced the outright ban with regulations on emissions similar to those in Australia.
The EV U-turn in Western economies has been forced by sluggish demand and geopolitical realism.
European and American manufacturers have struggled to match the Chinese on technological advancement and price.
Persisting with a ban on conventional vehicles would have given China unparalleled market dominance in finished vehicles and the manufacturing supply chain.
Abandoning combustion engines, a technology the Europeans and Americans have spent more than a century and a quarter perfecting, would have been an economic catastrophe for Germany, Europe’s largest economy.
EV mandates were the offspring of Net Zero 2050 mania — the belief that announcing a distant target could substitute for the hard, incremental work of persuasion, affordability and infrastructure. Governments convinced themselves that by setting a date, markets would obediently reorganise around it.
Consumers, it was assumed, would follow the script.
They didn’t.
Quietly but unmistakably, governments are retreating.
The back-pedalling across Europe reflects a dawning recognition that subsidies and tax incentives can shape incentives at the margin, but they cannot compel households to spend tens of thousands of dollars on products they don’t want, can’t afford, or can’t conveniently use.
Policy can accelerate adoption when conditions are right; it cannot conjure willingness where it doesn’t exist.
This is not a new mistake.
It is one of the oldest errors in policymaking — confusing administrative intention with social reality. Central planners have always been tempted to believe that if the target is clear enough and the timetable stern enough, behaviour will fall into line.
That illusion was tried repeatedly behind the Iron Curtain, where production quotas and five-year plans were meant to will entire economies into existence.
The result was not transformation, but distortion: shortages, workarounds, paper compliance and quiet resistance.
The slow rate of EV take-up is another headache for Bowen as he chases his ambitious target of a 43 per cent reduction in greenhouse gas emissions from a 2005 baseline by 2030.
It is hard to see how a meaningful reduction in vehicle emissions can be achieved, given that passenger vehicle emissions have flat-lined at around 40 Mt CO2-e this decade.
It is a reminder that when policy relies on such targets to produce outcomes that depend on millions of individual consumer choices, it is asking the impossible.
Governments can subsidise, regulate and exhort, but they cannot force the pace of innovation or magic away the economic reality that electric vehicles are more expensive to produce than their ICE equivalents.
Nor can it enforce the emotional attachment between people and cars, which looms large in purchasing decisions.
That is the trap Chris Bowen now faces.
His emissions targets assume a rate of behavioural change that markets, manufacturers and consumers have already rejected.
Australia’s climate policy, like Ford’s electric ute, is being driven more by wishful thinking than by demand.
Nick Cater is a senior fellow at Menzies Research Centre and a regular contributor to Sky News Australia
